Why Might People Cheat?

by Elaine Schwartz    •    Dec 7, 2011    •    689 Views

When are people more likely to cheat? Behavioral economist Dan Ariely says to look at sweatshirts, the Ten Commandments, dollar bills and cans of Coca-Cola.

In one experiment, Ariely discovered that more students would copy someone’s seemingly dishonest behavior during an exam when that person was wearing their (elite) school’s sweatshirt. Ariely’s conclusion? People are more likely to replicate dishonesty if it comes from a group with which they want to identify.

In this fascinating TED talk, he also connected minimal recall of the Ten Commandments to (less) cheating and explained why we take cans of Coke rather than dollar bills from a communal refrigerator.

Our bottom line? Ariely’s research provides insight about the cheating and corruption that disrupt economic activity.

The Economic Lesson

In the World Bank’s “Doing Business” Index, Greece has a relatively low rank.  I wonder whether it is tougher to do business there because its macro statistics have been “misreported,” taxes are “under-collected” and the underground economy abounds.

An Economic Question: Explain why corruption and cheating affect the ease of starting businesses.

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